Episode 173: Building a Healthy Failure Culture for Innovation and Learning with Amy Edmondson, Professor at Harvard
I was joined by a Harvard professor this week on the Product Thinking podcast. Amy Edmondson was my illustrious guest, author of the new hit book: “Right Kind of Wrong: The Science of Failing Well”.
In our wide-reaching discussion around psychological safety and the distinction between leadership and leaders, Amy’s ideas about how we ought to be better at failing took real compelling shape. I’m excited to share with you some of the thoughts and insights that arose out of our discussion below.
You’ll hear them talk about:
02:42 - Amy is an expert in failure. In product management, failure is a hot topic. It’s important for it to be okay to fail for an experiential and innovative environment to thrive. Innovation comes with failure. Amy distinguishes between intelligent and unintelligent failure by identifying four key characteristics needed. First is a pursuit of a goal, second is there isn’t an existing formula or process, third is you’ve done your background research and fourth is that the experiment should be no larger than it needs to be.
09:01 - To create a healthy failure culture you need to create an environment of psychological safety for everyone. It’s important for people to feel safe to fail to encourage them to share their ideas and not hold back when contributing to innovation. Amy suggests that leaders can promote psychological safety using a combination of behaviors and tools. For instance, leaders should always be willing to go first and acknowledge their own mistakes,therefore leading by example. Psychological safety in a work culture is incredibly important. Without it, people stop telling the truth.
27:28 - There is a distinction between leadership and leaders. A CEO is in a leadership role and there are many people that are influenced by them. This doesn’t mean only a CEO is a leader or display leadership qualities. In fact, individual contributors that display leadership behaviors are important to every team. They might not be in a leadership role, but Amy believes that leadership can start with anybody; it is a behavior and attitude, which is infectious when embodied.
Episode Resources:
Other Resources:
Intro - 00:00:01: Creating great products isn't just about product managers and their day-to-day interactions with developers. It's about how an organization supports products as a whole. The systems, the processes, and cultures in place that help companies deliver value to their customers. With the help of some boundary-pushing guests and inspiration from your most pressing product questions, we'll dive into this system from every angle and help you think like a great product leader. This is the Product Thinking podcast. Here's your host, Melissa Perri.
Melissa - 00:00:37: Hello, and welcome to another episode of the Product Thinking podcast. Today, I'm thrilled to host Amy Edmondson, an expert on organizational psychology and the Novartis Professor of Leadership and Management at Harvard Business School. Amy joins us to discuss her new book, Right Kind of Wrong, which talks about the power of learning from failures and what the right kind of failure looks like. We'll explore key insights from her research on leadership, building resilient organizations, and psychological safety. Amy will share her invaluable perspectives on fostering collaboration and innovation in the workplace. So this is definitely not one you're going to want to miss. But before we talk to Amy, it's time for Dear Melissa. So this is a segment of the podcast where you can ask me any of your burning product management questions. This week, we've got one on internal tools. Let's see what we have.
Dear Melissa, how would you recommend prioritizing internal business intelligence products like Datasets for self-service BI and Power BI dashboards? It is quite difficult because you cannot really link these dashboards to a certain company strategy. Do you have a framework that might be able to help?
All right, so internal tools are always a little challenging to prioritize, but there is not one quick and dry framework that's going to help you with this one. The big thing is making a compelling business case and getting buy-in for it. And the business case that you have for these self-service tools is how can we possibly be setting strategy if we cannot monitor the strategy and actually see if we hit our goals? So when you are setting strategy for companies, right, and you're setting success metrics, you have to have a way to actually monitor those things and make sure they're going in the right direction. That's usually where self-service BI and power BI dashboards come in. Now, I would try to make the case that to be able to do people's jobs effectively, to be effective product managers, effective leaders, effective HR people, you need to be able to measure your success metrics. You need to be able to keep on the pulse of it and be able to react if you find that you're going in the wrong direction, right? That's the most important thing that we do for companies. That's what being agile actually means. So I would try to make the case that if you can't monitor or can't actually look at those things, this are a non-starter for starting new initiatives or being able to kickstart work in teams. So that's really how I would concentrate on it. You're going to have to build a business case. If you try to do something like wait a short job first, which you've told me in more notes that you've tried, or some kind of prioritization canvas, what's going to happen is you're going to look at them against strategic objectives. And you're going to fall short on being able to prioritize them. That's why you can't actually do it for there. These are like enabling factors.
And we do have to take into account that enabling factors for organizations are just as important sometimes as setting the strategy. If you don't have the information to set your strategy and you don't have the information to monitor your strategy, that's how we go out of business as a company. So we want to make sure that those are treated importantly as well. So that's how I would think about your buy-in for your case. The other way to think about it too is that in a good portfolio strategy for product management, we usually dedicate some things to strategic objectives, which is the majority of the portfolio that we actually want to have, right? So we want like 80% or greater of our investment to go into those things. And this differs depending on how much tech debt you have. But then some of this stuff is actually operational as well. So we've got strategic investment, but we also have operational investment. And that's where I think your BI and data sets go. So if you're having... I talk to your leadership about how we make investments in these operational things that will unlock our ability to be able to make the right strategy decisions and monitor it, right? That's what those things are about. So maybe revisit the way that you think about portfolio planning and talk about how you invest in operations. And then at that point, you can start to prioritize it against other enablement initiatives and not against strategic initiatives. But every good product leader knows that you will have to invest in some of those things, though, in order to get the desired results and the outcomes and the strategy. Without that, we're just flying blind. So it's incredibly important that we do prioritize these things. So I hope that helps. And if you have a question for me, go to dearmelissa.com.
Let me know what your question is and I'll answer it on an upcoming episode. Now, let's go talk to Amy. Are you eager to dive into the world of angel investing? I was too, but I wasn't sure how to get started. I knew I could evaluate the early stage companies from a product standpoint, but I didn't know much about the financial side. This is why I joined Hustle Fund Angel Squad. They don't just bring you opportunities to invest in early stage companies, they provide an entire education on how professional investors think about which companies to fund. Product leaders make fantastic angel investors. And if you're interested in joining me at Angel Squad, you can learn more at hustlefund.vc/amp. Find the link in our show notes. Welcome, Amy. It's great to have you on the podcast.
Amy - 00:05:25: Thanks for having me, Melissa. It's great to be here.
Melissa - 00:05:28: So I'm really excited to talk to you today all about psychological safety and leadership in organizations. You've been studying leadership, organizational design, psychological safety, how we build empowered teams for a long time. What made you want to study this?
Amy - 00:05:44: I was working in consulting before I went to do a PhD, and I was fascinated by all of the factors that get in the way of organizations Learning. Learning, meaning adapting, changing, innovating, doing what they need to do to continue to thrive in a changing world. And it just wasn't something I had thought about before doing that work, but I became fascinated by how hard it is for organizations to learn. So when I got to graduate school, I didn't have at all a clear idea of what that would look like or how to study it, but I was open-minded to any potential study opportunity that would allow me to study Learning, which, if you think about it, is almost any study. But I got lucky enough to be invited to be a part of a large study of medical errors. You've got to be able to learn from errors, right? And that's a context where the stakes are high, the Learning really matters. And truthfully, I didn't set out to study psychological safety or failure. I just wanted to study learning. And it turns out, if you study learning, you will stumble into both of those other things. And particularly, psychological safety was a true accident. It was an accidental discovery where I just, I wasn't looking for it, but I found helpable differences in interpersonal climate across teams, and particularly climate related to, you know, is it acceptable or okay or safe to speak up about mistakes around here? It was quite remarkable how those belief systems could vary even within the same organization, but across groups within the organization. So, I got really interested in that and studied it quite deeply for a while. But I've always tried to and taken the opportunity to step back and look at the larger picture again. What does it take? What does it take for organizations to learn and to innovate, develop new products, as your particular area looks at?
Melissa - 00:07:45: So in your new book, too, you talk a lot about failure, which is, it's called Right Kind of Wrong, all about different types of failure and failing well. It's a huge topic in product management. So we always get into experimentation, innovation, and how do you build a culture of, I don't like to say culture of failure, but a culture where it's okay to fail, right, to take risks.
Amy - 00:08:03: I call it a healthy failure culture. And if you're in innovation, you know, product development, product management, innovation in any way, shape, or form, you had better be prepared to have some failures along the way, else you're not innovating. If everything you do works out perfectly, then you're only doing known things. You're working in familiar territory. You're not innovating. And part of the challenge of innovation is that failure comes with the territory. And so if people are, you know, allergic to failure or afraid of failure or don't want to admit failure. It will really bring the team down. It'll really bring the project down.
Melissa - 00:08:45: When you're looking at these organizations and you're studying the types of failure that you talk about in the book, what does good failure look like versus bad failure?
Amy - 00:08:53: It's a great question. So I call the good failure, you could call them anything, smart failure, good failure. I call them intelligent failures. Because I think they really truly are the result of very intelligent processes and actions. And they essentially have four criteria. The first is it's in pursuit of a goal. There is something you're trying to accomplish that you don't yet know how to do. And secondly, we don't yet have the knowledge and need to do it. It's just there isn't an existing formula or process. And third, you've done your homework. You've done enough background, reading, thinking, learning to have a reasonable chance of success. You've got a hypothesis and good reason to believe it might work, even though you also are aware of the fact that it might not work. And the fourth criterion is that that experiment should be no larger than necessary to get the knowledge you need to make the next step toward that goal. So it is not an intelligent failure. If the first three criteria are met and you bet the farm, you use all your resources, use your whole innovation budget on an unknown outcome of an experiment, then that would take away the intelligence of it. I'm confident that what I just said. Isn't terribly controversial. It's sort of. But in action, people often don't adhere to those criteria. They either play it too safe and don't really experiment. You know, and if it's they already know how it's going to work out. Well, that's not an experiment. Or they accidentally put at risk more than was smart to put at risk or they don't do their homework. They don't talk to a colleague and find out, oh, yeah, we already knew something about that. So they'll repeat an experiment we've already done. And then that's not so smart.
Melissa - 00:10:44: In product development too, I see a lot of similarities between this and what people were talking about 10, 15 years ago with Lean Startup. And that's how I got started doing workshops and teaching about it, teaching people how to do experimentation and MVPs. And I'd go into these organizations, got really excited about the concept of it, but they only wanted to just experiment for the sake of experimentation, right? They were like, the most important thing is to teach people experimentation, but they let these teams run wild towards these KPIs, which were how many experiments can you run in a quarter rather than what they produced with no direction. So that first little piece that you're talking about, you know, experimenting towards a goal really hits well with me because I've seen so many organizations just not experiment towards a goal. So as a leader, like, what do you do to make sure that you are set up well to go after the right kind of failure to like make sure the goals are set or gives people space to do that? What kinds of things do organizations do?
Amy - 00:11:45: You know, it's funny because I think this brings up the issue that leaders are teachers. I mean, part of the job of leadership is teaching. And so if you can see clearly and are passionate about a potential goal that we'd like to reach, never assume that because you said it once, it's clear. Emphasize it again and again and again, why it matters, why you're excited about it. And by the way, why we cannot get there without genuine experimentation, you know, genuine risk taking. So I think that's a part of it. And then giving people the space they need to experiment and letting them know that we don't expect every experiment to produce results right off the bat. That's the very nature of experimentation is that many of them won't. And so it's about sort of truly helping people get on the same page as you, the page you see clearly as a leader and helping them understand the context the same way you do and understand how much uncertainty exists, you know, and how much opportunity exists.
And then it's coaching, and enabling, you know, asking them the questions that help them sort of see things in a new way. Another thing that I think leaders really have to do is, you know, make it psychologically safe, obviously for experimentation, but also for speaking up, right? Because I think one of the things that can harm an innovation environment, I'm happy to call it a healthy failure culture, right? You need a healthy failure culture is if people, they get it, they know they're supposed to take risks. They know they won't all work out. But the last thing they want to do is tell their colleagues what they just tried that didn't work, right? They don't want to admit failures, even though they intellectually grasp that failures matter. And you know, what you need to do is model and create the conditions where people are absolutely willing and with, you know, a sense of positivity and humor to share the things that didn't go well. Because one of the most wasteful things that can happen in an innovation environment is where you engage in the same failure twice. It is no longer intelligent the second time around. So really make it safe to share ideas, share hypotheses, share results, and take advantage of the wisdom of teams, if you will.
Melissa - 00:14:04: So when you are a leader and you're trying to make that psychological safety happen in your culture, what types of behaviors or practices do you implement so that people do feel willing to speak up and be like, hey, I did this. It didn't work, but here's what I learned.
Amy - 00:14:18: It's a nice combination of behaviors and rituals or tools or sort of structures, if you will. And the behaviors are, you know, as a leader, always be willing to go first, you know, acknowledge your own mistakes, acknowledge your own failures. Say, here, I tried this, didn't work, but guess what I learned? You know, just model the behavior you hope to see in others because people really are paying attention to you. And then the second thing is remember that all of us have trouble seeing a situation in a different way than we spontaneously see it. So be probing, be asking, like, what are we missing? What other ideas could we have? You are asking questions to invite diverse input and tools and structures that might include like, okay, we'll just go around and share thoughts about this. Or we'll do a pre-mortem or we'll do a deliberate shift to a more exploratory mode from the confirmatory mode we find ourselves in. And I think all of these tools and structures can be your friend as a leader in an innovation context. So you're modeling the right behaviors. You're using tools. You're just constantly trying to sort of jar people out of that sense of complacency and into curiosity and then that drive to experiment.
Melissa - 00:15:30: How can you tell as a leader if the culture or the psychological safety is actually there? So I think some leaders look around organizations and say, oh, it's just like my people not stepping up or, you know, I want them to experiment more. And sometimes they'll blame the skills of the team rather than the culture of the environment they create. How, if you are the person running the company looking at that, can you actually say, hey, this is something I can control, or this is a skill-based issue, or this is something else?
Amy - 00:15:59: Living as a leader, you should probably start with the premise that it's both, right? That it's going to be some combination of you and what you're doing and them and how they're thinking and what they're doing. And, you know, it doesn't even matter to me whether it's 90% them and 10% you, because the part that you can most directly and most quickly shift is you. So assume just for good measure and for good practice that you are probably doing some things to contribute to their stuckness. And then step back and get curious. Ask yourself, I wonder what I might be doing that's making it difficult for them to experiment or get energized and, you know, move more quickly. And then, by the way, ask them too. I mean, it's a very disarming and powerful thing to do to say, I would really like to know what are the things I could do more or less of to help you thrive in this innovation role that you're in. And that could be to an individual or to a team. And just start a conversation like that and be appreciative of what you hear. So assume you're having, you're playing a role in the pattern that you detect. And then, you know, a more formal answer is you can actually go online to fearlessorganization.com and take a free scan or test, a psychological safety test that the team can all respond anonymously. And then you can look at the collective score and just talk about it. It's not a magic number that gives you a diagnosis like a medical doctor. But it gives you a data point that you can then say, huh, like, I wonder what this says, right? What does this mean? And where might the opportunities be for us to do better?
Melissa - 00:17:38: When you talk about learning organizations too and setting them up well to fail, you were mentioning one piece of this is investing no more than you have to, to learn. I've seen a lot of organizations do that when they start small because they're limited for resources. And then as you scale, they take really, really big bets on things instead of incubating it. How do you know what's the right amount to invest so that you can prove it out?
Amy - 00:18:04: Well, first of all, it is most clearly a judgment call. There's not a clear quantitative answer to that question. It depends on the context. You know, what might be more than you're willing to invest could be less than I'm willing to invest. So context matters. But I will say, because I think you're right, I mean, where I see big bets taken that fail, and I've studied quite a few of them, there generally were either in advance of those big bets that fail or one of two things. One is just we just decided to go for it. Right. We didn't really do, you know, our sort of smaller tests to find out more and then go for it. We just decided to go for it. Maybe we believed in it too profoundly. And history is full, by the way, of these kinds of failures. The Bay of Pigs 60 years ago, you know, considered one of the great foreign policy fiascos of all time was a kind of we're just going to go for it. Even if you really thought about it. Clearly and thoughtfully for 10 minutes, you'd realize it wasn't going to work. Right. So that's one possibility. The other is, and this one's even more depressing in a way, is that they've done the pilots. Right.
They've done the smaller tests of the idea, but those pilots have been rigged to succeed. I mean, not deliberately, but because the person in charge really wanted to do a good job and get a good performance review, let's say. They have sort of set their experiment up with too many resources, too many checks and balances, you know, too many people and made sure that that baby was beautiful. Right. And so then everyone says, wow, that was a great pilot. But unfortunately, it was a demonstration project rather than a true experiment. And so then because of that experience, people have a false sense of confidence that the real thing at scale is going to work. And it doesn't. So there are questions you need to ask yourself. First of all, do the preliminary smaller tests to get the data you need to have success later. And then second of all, make sure that the incentives are not lined up so that people are getting sort of rewarded either explicitly or implicitly for success, but rather for learning, for discovering, where all the fragile bits are. And then second, make sure that everyone understands the goal is to learn, not to demonstrate that it's viable. And third, if you find that you made no changes after that pilot, probably wasn't a very good pilot because you didn't learn anything. And anything that's sort of an experiment or quasi-experiment ought to give you some learning. And it shouldn't be learning that just says, oh, that was great.
Melissa - 00:20:51: When you think of organizations that are great at embracing learning and sharing learning and helping to promote that throughout the culture, what kinds of things are they doing to reflect and adapt?
Amy - 00:21:03: Well, I probably should say that most of the time, great is a thing that happens at the team level or the unit level or the department level. Like there are very few organizations that are consistently doing this throughout their very large enterprises. But when they do or when we look at the units that do, it is a combination of good leadership. And that by good leadership, I mean passionate about where we're going, but also fundamentally oriented toward developing other people and seeing the development of other people as the way you get results rather than deifying results and saying you better deliver those results. And oh, yeah, if we have any time left over to develop you, we'll do that. We develop you so that we collectively can get results over time. So there's good leadership. There's discipline. There's a real vigilance and energy that's palpable when you go into those kinds of organizations, you know, people are willing to do the hard and often frustrating work of pursuing novelty, knowing it won't always work out perfectly. And there they have put in place and rigorously use structures and systems that support that learning. And those can be formal agile methods, for example, or in a context that's a far more routine context, like a production operation, Toyota production system. Would be a good example of a system, which is a set of tools and practices that are beautifully integrated to deliver the result that they seek to deliver, which is a high quality, cost efficient vehicle.
Melissa - 00:22:42: Do you have any examples of teams that you've seen lately who've been doing this really well?
Amy - 00:22:46: I did just today teach a brand new case in the Harvard Business School classroom on Microsoft Western Europe on the period from about 2020, kind of early COVID. All the way through to the end of 23, when the organization, Microsoft Western Europe, which is about 12 country units, went through a fairly profound culture change under the leadership of then president of Western Europe, Cindy Rose. And she, first of all, built a culture of learning. I'd say that's probably the best way to say it. And there is nobody more performance oriented than Cindy Rose. But she realized that to get the performance, that they needed to get, and particularly with technology constantly changing, and even more since the case ended, which of course was right before AI broke out as such an important technology. But to get the performance they wanted, they had to create a culture of learning. And that was going to be a culture of vulnerability and sharing the truth and getting help and teaming across silos and not doing the normal thing, which is to hide, tell about your successes and hide your problems. Because more often than not, the problems you have are things, I've had and I could share you, how I solved it, and you know, we can all do better through that. So, I mean, that was a kind of to me, that's a good example, because they, they really started as sort of 12 separate thief-domes and, and because a more unified team of people that were trying to pursue opportunity in Western Europe. So, that's a good recent example. I mean, I think classic examples. I love to tout the wisdom of Pixar. And at Pixar, there's been a lot of, you know, leadership goes first and Ed Catmull will tell you first one to you've got to go first and sharing your mistakes and so forth, but also beautiful example of strong systems and rituals that we use to make sure we're sharing the truth, critical feedback, things that go wrong, et cetera.
Melissa - 00:24:50: Did you know I have a course for product managers that you could take? It's called Product Institute. Over the past seven years, I've been working with individuals, teams, and companies to upscale their product chops through my fully online school. We have an ever-growing list of courses to help you work through your current product dilemma. Visit productinstitute.com and learn to think like a great product manager. Use code THINKING to save $200 at checkout on our premier course, Product Management Foundations. I really liked reading his book on that. I thought that was such a great example of how they build that in. One thing I've seen with teams too is that if the leaders perceive they're in a really competitive or high risk market, right? Let's say like competitors are catching up, the pressure's on, right? They tend to go all in on the big bets rather than sustain the innovation because they were trying to get ahead of the market as fast as possible. When you were trying to balance that risk of being disrupted with the risk of not innovating fast enough, how do you think organizations should approach experimentation and failure? Like, is there anything that you would pull out there and say, are they letting fear get ahead of them or?
Amy - 00:26:04: First of all, name the bind, declare the dilemma that there is this premium on and this need for speed and you can't really force invention. You can't force a technology to be ready when it isn't. So you've got to, even though the pressure is on and let's be honest about the pressure being on, it is still, in fact, even when the pressure is on, it's even more important to do what you need to do so that the truth can be told, right? So you want people to have energy and drive and, you know, be willing to work as fast as they can, but no faster. Because if you do a shortcut and you don't do the third criterion of do your homework, make sure you've learned as much as you can from your colleagues, from the literature, what have you, so that you have what we could call a good hypothesis. Don't take a shortcut on that. Because if you take a shortcut on that, you just end up wasting resources. You don't get there faster. You just get there more expensive.
Melissa - 00:27:05: I think that plays into your point too earlier about do your homework before you actually go into these and do the experiments. Because I see also everybody get into a room and say, we're going to do this this year. And then there's no due diligence, right? There's no research. There's no data.
Amy - 00:27:22: In my book, The Fearless Organization, I write about what happens when, you know, a company and its leaders are absolutely committed to a particular innovation or a new product, you know, launch, that the strategy really very much depends upon its success. So they are either deliberately or inadvertently at risk of emphasizing how much they care. That this thing is a success. And if psychological safety is missing, what happens is people stop telling the truth, right? If it's not ready, not ready for prime time, but the boss is saying it must be ready, they find workarounds. They find ways to declare it ready at VW, famously developing software. You know, it almost seems inconceivable, but developing software to cheat the regulators and hoping against hope that they won't be caught. But the truth was the technology. You know, the engine wasn't ready to pass those emissions standards. And, you know, no amount of hiding will keep the truth hidden forever. It will come out and then it's much worse.
Melissa - 00:28:30: There's a really big conversation too in product management. And I've seen a lot of people working in organizations that you're describing right now where it's like, this is the thing we have to go after, right? And the leaders are so set on this particular feature or product or thing that's going to save them, right? And the product managers are asking themselves, what can I do, right? Like, is there something I can do on this team to help steer the ship or to help surface up the issues that I'm actually seeing? Have you seen that ever where individual contributors or team members have been able to surface up like the issues that they're seeing with those culture or help turn it around?
Amy - 00:29:04: Yes. You mean even if it doesn't seem that the leaders are making it easy? Yes. I love to make a distinction between leadership and leaders. So leader is a role and leadership is a behavior. It's a behavior that you engage in when your goal is to positively influence others. And, so if I'm CEO and I'm engaging in leadership, there's an awful lot of people who will be potentially influenced by me. But let's say I'm an individual contributor or I'm on the front lines of the factory putting things together. I can still exercise leadership in the following ways. I can still call attention to what I see, to the observations I'm making. Now, they may be right. They may be wrong. But if I call attention to them, I can get help. I can get validation or contradiction from a colleague or from my manager. I can do the absolutely extraordinary thing of just asking questions, not asking questions like an interrogative reporter, but asking questions like, how should I think about this? How do you see this? Like, what are we missing? You know, just when you are the person who shows up curious and quite literally inviting other people's thoughts into the conversation, you are a leader. You are someone who is making a difference. And so just in a way, I want to tell people, that it doesn't matter what role you're in. There are things you can do. And they're largely around calling attention to the reality as you see it, knowing that it's a partial reality, asking, seeking, inviting input from others and responding in a way that's appreciative. Oh, that's interesting. I hadn't thought about it that way. Right. Doesn't have to be fake. Nice. It's just like, that's cool. Right. Because it's quite rewarding for any individual to know that their thoughts were heard. So just do it. Right. Even if you don't believe. You have excessive permission or encouragement to behave in a learning-oriented, curious way. Just decide to do it anyway.
Melissa - 00:31:02: That is a big thing I keep telling product managers in certain areas. And I do believe there's, again, this big topic that's going on right now. There's certain situations where I think people have tried that and they fail and the organization is just not supporting it. But I see so much opportunity for product managers out there to just ask questions. A big thing that I keep observing is people going, there is no strategy. Right? The strategy doesn't exist in this organization. But they never even asked a question to see if there's a strategy or say, hey, here's what I'm working on. How does this ladder up to the bigger picture or what you see there? There's no questioning. Right. There's no curiosity. It's just like, oh, we don't do that. We don't have this here. And then there's just this learned helplessness of I'll wait around for somebody to just tell me what to do. And I think that's so hard for some people to break out of.
Amy - 00:31:49: I think so, too. And what you just described is so important. Because I think. I think sometimes there are organizations that are sort of genuinely toxic and, you know, you can bang your head against the wall and you get nowhere. And with enough data, you should probably find yourself another place to contribute because you have too much to give to just, you know, waste it in that way. But what I see a lot more than that is people just believing that the organization isn't conducive to risk taking or to speaking up. And in fact, there's all sorts of colleagues. And leaders who are just would be all too happy to have you take those risks or speak up or offer ideas. And so to begin with, just don't assume, you know, don't adopt that posture of learned helplessness, even if you've learned it. You know, even if you've come by it honestly, you're always looking for opportunities to get out. Because earlier we were talking about the conditions in any organization are always multiply determined. There's no single cause. There's not just it's just bad leadership or it's just, you know, learned helpless employees. It's both. And the only part of that equation that you can directly impact is your own behavior and your own attitude. So start there. And I promise you, it can be infectious.
Melissa - 00:33:10: And some of those organizations too, I've observed this trend, especially in like high gross SaaS companies where we have a founder who got to where they are and was extremely successful because they embraced experimentation. They embraced failure at the beginning stages, right? They're like the poster child for how we do lean startup or how we get to an MVP. And then as these organizations scale and it's like 10, 15, 20 years later, you go in and you find that there is actually no culture of experimentation anymore. And this could be a 5,000 person company, it could be a 10,000 person company, it could be a 1,000 person company now, but they scale, they scale. And the founder is usually still in charge. But when you look at the strategy or how they're approaching innovation, it's either really big bets. There's no experimentation there. There's no investing in innovation, like a small bet and then growing it. It's just kind of like they go all in and they lose that. Why do you think that happens?
Amy - 00:34:01: That is one of the oldest phenomena in, I think, sort of management. We know that, or at least in entrepreneurship studies. So it's often referred to as the S-curve, where there's a phase one, where people are all too willing to experiment. There's enormous psychological safety. People are like, hey, what if we try this? Or, oh, that won't work. You know, there's just incredibly honest, fast, learning-oriented, creative conversation and action going on. And then lo and behold, we stumble into something that works. We can monetize. And the goal... And the program shifts from, you know, discovering something that works to how do we streamline it? How do we produce it at scale at a low enough cost that we can actually make a profit, right? And then that becomes... The culture starts to cohere around that goal, which is a very different mindset, a very different, you know, set of conditions. And so it's great for a while, right? Because it really is working.
And we've got customers who are happy and we've got profits and all as well. But the world keeps on changing. And so at a certain point, our beautiful machine that efficiently produces what we came up with a while back is no longer quite as relevant to our customers. Or new players have come in and they do it even better. And we're the last ones to know. So all S-curves phase two is that sort of wonderful, steep growth. All of those. And we never think it will be us, right? But they all come to an end. And then you either come to an end and, you know, die a slow death or you find yourself shifting deliberately to a new fomenting creative, It's not called phase one anymore. Now it would be like phase three, where how do we deliberately reinvigorate our experimental mindset, our willingness to take risks, our willingness to fail? Because we haven't failed. You know, that whole phase two thing is not about failure. Now, in great organizations, of course, you don't have all your eggs in one basket. There's always an R&D innovation activity going on somewhere. Because we're planning for the future. But, you know, what can happen in organizations is that their identity lives in, you know, one of those domains. You know, it lives in the sort of, you know, more of the creative domain or more the efficiency domain. And so you've got to deliberately knock yourself out of the one that may leave you at risk of becoming obsolete over time.
Melissa - 00:36:29: Unfortunately, I see like a lot of organizations who get to that top of the S-curve, this repeatable pattern, either get bought out by private equity, acquired, right? Like something not desirable really happens to them. What can you do as like a founder or a leader in there to like preempt that, right? To check in and see it and then turn things around.
Amy - 00:36:48: I think it's the responsibility of a founder or a leader, even if it isn't a founder, to see the writing on the wall before it's visible to everyone. In a sense, that's what leadership is all about. And how do you do that, right? How do you see writing on the wall that not everyone sees? You force yourself to step back, right? To get the bigger picture. You don't go in and do other people's jobs, you know, in the factory, right? You sort of, you trust and assume they're doing what they need to do to produce today's value proposition for today's customers. But you are the one who is stepping back and thinking, okay, if a new competitor suddenly showed up who absolutely could eat our lunch tomorrow, what would they be doing? Now, that's a creative question and you may want to invite other people in to help answer it with you, but you're always stepping back to say, what are we missing? What other opportunities are there? What risks are out there? You know, what ways will this particular approach start to become less relevant to our customers or to future customers? So you're the one who's responsible for maybe convening others to help, seeing the bigger picture and getting out that crystal ball to see the future, even though you don't really have a crystal ball, but you can make some pretty good hypotheses if you put your mind to it.
Melissa - 00:38:04: The other piece I see on here is that some of those, especially founders, right, who grow into CEOs of these companies and now they're at scale. A lot of them have never scaled a company before, right? Or they've never been in that position of scale before. So they're looking around and going, they don't know what they don't know. And they usually have a team of leaders, hopefully, who do know a little bit more there. If you're a team of leaders and you're looking at this and you've got a founder who's like, this is my identity. We're betting the house on this, you know, this idea, this risk. Have you seen any good approaches for surfacing up this issues, maybe them being the crystal ball and like stepping up and trying to work with them to surface up some of these issues and make sure it doesn't go in the wrong direction?
Amy - 00:38:46: Yeah, I think it's a blend of, you know, of deep respect and appreciation for what they've done while helping them. I'm in a, you know, in a genuine spirit. I think if you approach these folks with a genuine spirit of wanting to be helpful. You know, not wanting to prove them wrong. Not wanting to win or lose, but a genuine desire to help them learn. And by the way, you should learn along the way as well, because they may see things you miss and vice versa. You can do it and you do it through inquiry and you do it through imagination. You do it through the use of tools, again, like the pre-mortem where it's, okay, let's just imagine, you know, it's six months from now or six years from now, whatever the right timeframe might be in the industry. And we have suddenly been put out of business or bought on fire sell by a firm, be firm or whatever. And what would have been the best explanation for this outcome that, by the way, I hope very much doesn't happen, right? So it's done with creativity. It's done with empathy, but it's pushing for greater perspective and greater thinking and just broaden that vision.
Melissa - 00:39:54: So one question I wanted to ask you, too, for product managers out there who are maybe saying, hey, this organization I'm at, as we said, it's time to jump ship. It's not working here. And I've done all I can to, like, beat my head against the wall. How do you assess while you're interviewing or looking at other organizations that this is a psychologically safe environment or this is a place that embraces learning?
Amy - 00:40:17: I think my answer to that question partly depends on whether you're only getting access to it. I think it's very hard in just one-on-one interviews. I mean, I think anyone can nail an interview. Anyone can put forward a good perspective on the situation for you. It's really helpful if you can see people interacting in a group. So if you can have a visit and you're sort of, you know, join people at lunch or join people in a meeting, you can see the degree of deference and energy and curiosity and interest in each other's opinions. Listen very closely. And I think you can sometimes do this in one-on-ones for people's, you know, actual willingness to talk about failures, to share with a sense of equanimity and sometimes a sense of humor some of the things that haven't worked out. And if people literally have no such stories. I think it's a red flag.
Melissa - 00:41:07: That's a really good tip for product managers out there. What are you excited about looking at organizations in the future to keep studying? About how they're just studied failure experimentation. What next?
Amy - 00:41:19: I'm super interested in the future of work and how we design work better. Because with all of the conversation that's been going on over the last few years about, you know, remote work, in-person work, hybrid work, it's often very contentious and sort of unilateral. Well, this is right. You know, it's me versus them. It's just, I think, a lot of non-scientific things being said. And I'd love to just, and what I'm doing is with Mortensen at INSEAD, trying to take a very scientific perspective to like, what do we know and what can we learn about how do you design work well based on the goals of that work? And so, obviously, if you're taking care of patients in a hospital, you got to be there at the bedside, right? And obviously, if you're in a factory making Lego blocks, you better be there. But there's an awful lot of work where it's somewhere in between. And we are at risk, I believe of downplaying the magic that happens when you get a team together, especially in the product space, in the innovation space. But the hard part about this scientifically is it's very hard to figure out how to measure it. But there is true magic that happens in a proximal space. That doesn't mean we have to be proximal all the time. But I'd really like to get some better measures, better data, and better understanding of things, and hybrid work isn't the only thing. But how much emphasis? In learning and growth and culture and community? And how important is the purpose? And how do these all fit together to create an absolutely energizing and enabling employee experience?
Melissa - 00:42:58: I'm really excited to read all about that when you start to get into it.
Amy - 00:43:01: It'll take a bit of time to get there.
Melissa - 00:43:04: Yeah, it sounds like a big study though. No rush, no rush, but I think we're all wondering. So if we want to follow along on that journey too, is there somewhere we can go to read your work and follow along?
Amy - 00:43:14: We don't have any sort of ongoing logs on this, but we do have a Harvard Business Review article from about a year ago called Rethinking Your Employee Value Proposition, which sort of states some of the things we're interested in and uses some of the qualitative data. Now we're collecting a lot of quantitative data. You know, stay tuned for a few or at least one new digital article relatively soon. But eventually we hope to put this out in a book, but we should have some interim things to say along the way.
Melissa - 00:43:42: Well, I'm excited to hear them. We will definitely put all those links in our show notes too at productthinkingpodcast.com. Amy, thanks so much for being with us today. We will link to Amy's profile and to her books at the productthinkingpodcast.com so you can go buy them. So please make sure to check them out. And we will see you next Wednesday for another episode of the Product Thinking podcast. And in the meantime, if you have questions for me, on product management, submit them to dearmelissa.com. Thanks again, Amy, for being here.
Amy - 00:44:08: Thank you so much for having me.